Porter's Competitive Forces Analysis
Porter’s Theory of Competitive Forces
In the Lifestyle as Medicine program, there will be commercial stakeholders involved, who’s interest is marketing competition and making profit. Therefore it is important to understand the market, and how positions are occupied on this market. According to Porter, five different forces shape the competition between different stakeholders (Fig. X), these are: the treats of new entrants, the bargaining power of customers, the bargaining power of suppliers, substitute products or services and the industry, which is jockeying for a position on the market. In this study the industry are the providers of products or services, which for example can be health care services, pharmaceuticals or medical devices. The suppliers are the suppliers of raw materials, or providers of services for these companies, and the buyers are T2DM patients. These three forces constitute the normal health care services that currently provided to T2DM patients. With the addition of our substitute product (Lifestyle as Medicine) and the new entrants that will offer this service, our Porter’s model is complete.
The strength of these competitive forces is dependent on the return on investment (ROI). The more ROI can be made from a product or service, the less prominent these competitive forces are present, and vice versa. In the following …show more content…
However, these entrants will also face barriers, and resistance from other stakeholders, which are already active in the field. There are six major sources of barriers, namely: economies of scale, product differentiation, capital requirements, cost disadvantages independent of size, access to distribution channels and governmental policy. When the entrants have few of these barriers, and little resistance from other stakeholders, they can pose a serious treat. Contrary with a lot of resistance, they will have to spend more energy on coping with
In the Lifestyle as Medicine program, there will be commercial stakeholders involved, who’s interest is marketing competition and making profit. Therefore it is important to understand the market, and how positions are occupied on this market. According to Porter, five different forces shape the competition between different stakeholders (Fig. X), these are: the treats of new entrants, the bargaining power of customers, the bargaining power of suppliers, substitute products or services and the industry, which is jockeying for a position on the market. In this study the industry are the providers of products or services, which for example can be health care services, pharmaceuticals or medical devices. The suppliers are the suppliers of raw materials, or providers of services for these companies, and the buyers are T2DM patients. These three forces constitute the normal health care services that currently provided to T2DM patients. With the addition of our substitute product (Lifestyle as Medicine) and the new entrants that will offer this service, our Porter’s model is complete.
The strength of these competitive forces is dependent on the return on investment (ROI). The more ROI can be made from a product or service, the less prominent these competitive forces are present, and vice versa. In the following …show more content…
However, these entrants will also face barriers, and resistance from other stakeholders, which are already active in the field. There are six major sources of barriers, namely: economies of scale, product differentiation, capital requirements, cost disadvantages independent of size, access to distribution channels and governmental policy. When the entrants have few of these barriers, and little resistance from other stakeholders, they can pose a serious treat. Contrary with a lot of resistance, they will have to spend more energy on coping with